Although it is classified as an independent company, Amtrak is the monopoly railroad service in the United States that is essentially controlled, managed, and financed by the government. Amtrak has been an eternal money pit, now gobbling about one and a half billion dollars of the federal treasury every year.
Amtrak officials insist that the popular northeast corridor service between Washington DC and Boston is profitable. The Acela train is the fastest in the nation, running only on the northeast corridor at about 85 miles per hour, much slower than trains in Europe and Asia.
Over several decades, the bleeding of red ink by Amtrak has invited frequent calls for reform by Republicans. Lately there has been talk of opening the northeast corridor to competition against the Amtrak monopoly. As usual the White House and the senate are voicing their opposition to the idea of competition, in spite of mounting economic woes. One interested party is Sir Richard Branson, chairman of the Virgin Group who already operates railroad service in the United Kingdom.
Amtrak claims that failure to achieve profitability comes from the essential transcontinental services that Amtrak must provide, which have never made money. Cross-country service traverse many thinly-populated parts of the country, which produce few riders.
If the United States wants to maintain a railroad passenger service that covers the entire country, it may be stuck with forever having to subsidize the maintenance of railroad stations along these long routes that provide little or no revenue. However, what is not known is the exact breakdown of Amtrak labor, equipment, and maintenance costs. Even if the long routes remain unprofitable, they could be made less so.
Are Amtrak employees paid more than comparable labor in the private sector? Could Amtrak accomplish the same amount of work with less employees? A one percent pay cut for all Amtrak workers would be bearable to all of them, yet save a lot of money. Could the amount of Amtrak stations be reduced, or their operating hours reduced? Perhaps initiating service to neglected communities could bring more revenue. There are a lot of possibilities to explore, if only the government would allow it.